The environmental and social impact of human behaviour has often been relegated to the fringe. Covid-19 has changed all of that, laying bare the true scope of inequality and interconnectivity across the world. Each global crisis further highlights that millions of our fellow human beings are suffering from the negative impacts of climate change as well as from deficient education and healthcare systems, political conflicts or natural catastrophes.

While these challenges are acutely felt in emerging markets, they are not unique to them. The United Nations estimates that around $3-billion to $5-billion annually will be needed over the next 10 years to achieve more equitable societal and environmental conditions globally.

This huge task can only succeed with close collaboration and joint financing by both the public and private sectors. In order to fund substantially more hospitals, universities, solar parks or affordable housing in underserved communities around the globe, we require much more than a handful of cash pots and development agencies.

Hence, we have joined forces with 28 other CEOs across industries and regions to form the UN-backed Global Investors for Sustainable Development (GISD) initiative. Our ambition is to mobilise expertise, capital and commitment from all sides to scale up sustainable investments in communities and industries most in need. The UN Sustainable Development Goals (SDGs), which balance global economic growth with social and ecological value, serve as a blueprint to measure the societal impact of an investment.

Sustainable investments can create a good business case: in recent years, sustainable indices have outperformed their broad market counterparts more frequently. Integrating environmental, social and governance criteria into portfolios or even shifting them completely towards net-zero greenhouse gas emissions or a measurable societal impact is considered to create long-term stakeholder value. A strong investment case defies barriers. So why not simply invest more in green and social projects?

Unfortunately, the market environment is still challenging and requires specialised insights from project developers, local authorities and investment managers. Meaningful information for asset managers on technical aspects of potential projects as well as an applicable risk-return profile is often lacking. Therefore we are working with our fellow companions and engaged authorities on market-oriented solutions to lift up this still-young market segment. Interested organisations and firms can access some of our outputs, which include a clear definition for an SDG investment, a call to action for Covid bonds and a report to the European Commission on SDG investing as it seeks to renew its sustainable finance strategy. 

In the next year, the GISD will continue balancing the supply- and demand-side to shift the ecosystem towards more long-termism. We aim to develop investment vehicles to catalyse capital flows to emerging markets in support of the SDGs. One key driver for integrating social and ecological criteria into the financial system is to create standardised metrics and embody them into existing reporting frameworks. Based on the experience “only what’s measured, can be managed”, this detailed work happens away from the big stages, but has an enormous impact. It also requires constant advocating among the global community of decision makers in business and politics to recalibrate our overstretched system towards an inclusive capitalism.

We warmly invite all other business leaders to sail along with us on our journey. Every business can contribute to sustainable development by integrating sustainability into its business model. There is one good lesson from the pandemic: standing together as a strong global community, we can make the ideals of education, security, health and fair work accessible to more people and communities around the globe, and in so doing move towards shared prosperity. DM

The Global Investors for Sustainable Development initiative was initiated by the Secretary-General of the United Nations, António Guterres, and uses the expertise of the various sectors to support the UN agenda for sustainable development. GISD is jointly led by Fourie and Oliver Bäte. Other members include the CEOs of Bank of America, PIMCO, Santander and other leading international companies.